Darline Jean

Website Magazine

July 1, 2016

Much of the publishing world has been abuzz about the development of header bidding, but the conversation has focused almost exclusively on adoption, with little detail on how publishers should actually use the technology to grow their bottom line. Technology is great, but its true value is derived from how much return it yields for a publisher. For header bidding – and any other technology – to take hold and make a difference, it must fit into a publisher’s larger revenue strategy.

The core promise of header bidding is that it gives publishers the opportunity to increase revenue while eliminating some of the technological complexity of programmatic. But while publishers begin to explore header bidding tech integrations, many are still left wondering how to maximize revenue and balance direct and programmatic sold inventory. Evaluating and adjusting your sales mix from a strategic monetization lens is what will make the difference to your revenue – but can easily be overlooked.

Let’s look at a fairly typical situation, where a publisher has signed a $2 million upfront deal with a major advertiser for delivery across one quarter. The publisher’s contractual obligation is to deliver a certain number of impressions over the course of the contract. Traditionally, publishers would focus on filling this buy and make any unsold inventory available via programmatic. But with greater adoption of data-driven marketing and targeting, many marketers may pay higher programmatic CPMs to reach a consumer if that consumer meets specified targeting requirements.

The strategic challenge publishers face is if they should let programmatic compete directly with the guaranteed inventory. The answer is that they absolutely should.

Header bidding allows publishers to look at these potentially high-paying programmatic campaigns and choose to strategically suppress direct-sold campaigns to earn the higher price point. Direct-sold campaigns may still account for a major percentage of revenue, but most publishers usually don’t have trouble delivering these campaigns. The best way to maximize revenue across all the inventory is to strategically evaluate direct partners and programmatic partners at all times, and determine when it makes sense to bypass a campaign to maximize programmatic revenue. Header bidding is merely the mechanism providing publishers with the technology they need to make these decisions.

Header bidding is not a “set it and forget it” type of technology. It’s a tool that requires the publishers to put rules into place and then adjust those rules depending on the campaigns running and the audience visiting their site. Publishers need to consider the length of campaigns, the price of inventory and whether that inventory is guaranteed. Publishers’ header bidding technology can use this information to sell inventory to the highest bidder until they reach a window in which they must deliver their guaranteed inventory.

Think of it this way: CDs are safe investments with low-interest rates that turn a profit over time. Meanwhile, the stock market can provide a higher return, provided that you stay on top of your investments and buy and sell at the right time. If anything, header bidding emphasizes the need for publishers to adopt a similar proactive strategy for prioritizing inventory and maximizing revenue.

This concept is even more important within the greater context of online media, where publishers are focused on maximizing revenue yet continue to play it safe. Even as tools like header bidding enter the market, it seems that publishers are still far behind where they should be when it comes to programmatic investment, capabilities and earnings potential. Investment in technology now will pay off later. It's time to step off of the sideline and start leveraging technology as a core component within more ambitious monetization strategies.